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How to Rescue the US
Economy
This week, Federal Reserve Chair Jerome Powell declined to say
whether he was “cool
or uncool” with passing the American Rescue
Plan.
But in his testimony before the
Senate Banking Committee, Powell nevertheless made the case for a
massive rescue package, as Roosevelt Fellow J.W. Mason explains on the
blog.
“If you support a federal relief
bill on the scale of the American Rescue Plan or larger, you should be
encouraged to find that the Fed chair is on your side,” Mason writes,
pointing to three
Powell arguments
that capture the need and justification for more public spending
now.
- The
public debt shouldn’t be a factor in determining how much we spend on
stimulus and relief.
- Inequality is stifling our economic growth.
- The US
wasn’t actually experiencing full employment before the
pandemic.
Full economic recovery is also far
from guaranteed without greater support, as both Powell and Roosevelt
Chief Economist Joseph Stiglitz have noted.
“Changes to the regimen—like tax
and interest-rate adjustments—may be necessary. But to do anything
less than what Biden has proposed would be irresponsible and
reckless,” Stiglitz
writes for CNN
Business. “Congress must pass this legislation or risk an anemic and
devastatingly incomplete recovery.”
In other words, President Biden’s
$1.9 trillion package should be the floor, not the
ceiling.
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